WWE held a conference call today to discuss the first quarter earnings release which was sent out earlier today. Taking part in the call were WWE Chief Executive Officer Linda McMahon, Chief Operating Officer Michael Sileck and Chief Financial Officer George Barrios. Here is a recap of the conference call.
Linda read a prepared statement, putting over the numbers for the quarter and the success of Wrestlemania, noting it was the highest grossing live event in WWE history. She noted that Smackdown would be switching to MyNetwork TV this Fall, saying it was a "better fit" for WWE and would provide "better financial returns over the long haul". Linda also mentioned the upcoming toy deal with Mattel, and put over the introduction of the kid's magazine, saying it was important to reach fans at a young age. She also praised new CFO George Barrios, who replaced Frank Serpe, who retired after over 20 years with the company.
Michael Sileck read a statement, noting WWE's success in a down economic time. Sileck noted the increase in PPV buys for No Way Out and Royal Rumble this year versus last, noting that "streamlining" their PPV schedule (in other words, dumping New Year's Revolution and December To Dismember) has helped the buys of the remaining events. Sileck noted their continued international growth, in particular their successful live events in Latin America and increased television ratings and licensing deals in Spain. He talked about losing some ground on the web (WWE.com traffic dropped this quarter), and that they are refocusing their efforts when it comes to their online output.
George Barrios then reviewed the financial numbers. It should be noted that Wrestlemania was part of the first quarter in 2008, while it was included in the second quarter last year, so it is a no brainer that revenue would be much higher for the first quarter this year versus last year. Having Wrestlemania and the Royal Rumble in the same quarter made it, on paper, an incredibly successful quarter for the company. Barrios noted that taking Wrestlemania out of the mix, domestic live attendance was down in this quarter while revenue was "essentially flat" in that area.
A brief Q&A session was then held with investors. Some highlights from this session:
- Regarding "slippage" in TV ratings, it was glossed over as being the "ebbs and flows" of television viewer ship, and that USA Network was thrilled with what WWE is giving them. Sileck noted that Vince McMahon was happy with the creative direction and talent roster.
- They stated that a third of the PPV buys for Wrestlemania came internationally, and that was on par with last year. Over time, they are hopeful to raise PPV prices in international markets.
- Michael Sileck in saying that Wrestlemania cost more in talent fees this year, stated, point blank "We did not pay Floyd Mayweather $20 million, as reported". He didn't say the exact amount Floyd got (or is getting, if he gets a piece of the DVD sales). Sileck noted some of the increased costs for Wrestlemania this year, including the production for the outdoor event and the increased advertising.
- Linda heavily praised Mattel as WWE's new toy partner, noting WWE is providing them a clear "boy's toy" to push.
- As always, the JAKKS-Pacific lawsuit was described as "slowly" moving along.
- Regarding the 9% drop in domestic live attendance in the quarter (minus Wrestlemania), it was explained as being a result of the routing for their tours, and that they expect that over the course of the year, live attendance will be higher.
- Regarding the 6% drop in web traffic and resulting drop in e-commerce, Sileck stated that they making changes to WWE.com and are targeting "lesser known wrestling sites that are existing on our back and divert those users back to WWE.com". He put over the WWE Fan Nation site, and said they have implemented a new method of uploading photos on the site. No mention of the "Industry News" section.
- They are doing 80 International events this year, as opposed to 75 last year. They are looking into doing a tour of China next year, noting they wanted to get past the Olympics before running there.
- Regarding DVD sales, they noted that they have Wrestlemania, a Rock collection and a Ric Flair collection coming out that they expect all to be big sellers. As always, they expect the fourth quarter of the year, with holiday sales, to be their big money quarter for DVDs.
It should be noted that Linda McMahon didn't field the questions as much as normal, with Sileck handling the majority of responses. Shockingly, there was no mention made of WWE's achievement of getting all three popular presidential candidates to appear on their programming recently. Less shocking, there was no mention made of the Wellness Policy, the Jeff Hardy suspension, what Floyd Mayweather really got for Wrestlemania, or the Ashley Massaro situation.
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